Protecting your children’s inheritance - a Case Study

Anita had a child from her first marriage, Sarah. When Anita remarried she and her new husband Derek bought a home in their joint names. Derek had a son from a previous relationship, James. He and Anita had always promised each other that the survivor of them would share their estate equally between Sarah and James.

Anita didn’t make a Will before she died. As she had owned the house jointly with Derek as “joint beneficial tenants” the house passed directly to Derek. All monies in joint bank accounts became Derek’s as well and, as Anita only had a few hundred pounds in a bank account of her own, Derek benefited from that too under the rules of intestacy as a surviving spouse. Derek didn’t need to apply for a grant of probate in respect of Anita’s estate because she had so few assets in her own name.

Derek died a few months later. He had made a Will shortly after Anita’s death leaving his Estate to James.

It is an anomaly that Sarah receives nothing in this case study whereas, if her mother had survived Derek, the house would have passed directly to Anita and Sarah would then have benefited from her mother’s estate under the intestacy rules as the sole surviving child. Of course, in those circumstances it would be James who lost out.

What could Anita have done to provide for her daughter?

Anita could have agreed with Derek that they would jointly own their home as “tenants in common”. In this way a property doesn’t automatically pass to the survivor of joint owners. Anita could then have left her half of the house to Sarah by Will, although perhaps with the right for Derek to continue living there during his life, depending on their other financial circumstances.

What can Sarah do in these circumstances?

Sarah could arrange for her solicitors to take out a grant of probate in respect of her mother’s estate. She would then have six months to make an application for reasonable financial provision for her maintenance from her mother’s estate under the Inheritance (Provision for Family and Dependants) Act 1975. A court could then treat Anita’s 50% interest in the home she shared with Derek and in the joint bank accounts as part of her estate and make provision for Sarah from those monies.
Sarah would have to act quickly as it would not be fair on James if he had no notice of a potential claim before selling his father’s home.
Sarah should try and reach a settlement with James, either directly with him or by some form of dispute resolution such as mediation.

In any claim under the Inheritance Act a court has to take account of various factors including the financial needs and resources of the parties, any obligations the deceased had towards an applicant or any beneficiary, the size and nature of the estate, any health issues and any other relevant circumstances.

Claims for adult children in circumstances such as Sarah’s are always fact sensitive although, where a child is financially independent, his or her chances of success are likely to be significantly reduced.

Alison Dukes specialises in contentious probate matters including Inheritance Act claims. She can be contacted on 0117 962 1205 or by email alisondukes@amdsolicitors.com

This article is provided for general information purposes only and represents our understanding of the relevant law and practice as at the date of uploading. This article should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.

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